Contradiction despite this examination of the fixed

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Financial and Managerial Accounting Using Excel for Success
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Chapter 26 / Exercise EX26–7
Financial and Managerial Accounting Using Excel for Success
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Contradiction : Despite this, examination of the fixed overhead budget formulae reveals that it is budgeted similar to a variable cost Budgeted and Allocated Fixed Overhead Costs : 12,000 10 Budgeted Applied FOH PVV (F)
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Financial and Managerial Accounting Using Excel for Success
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Chapter 26 / Exercise EX26–7
Financial and Managerial Accounting Using Excel for Success
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Dr Allen Huang’s Lecture Notes 2013_Topic 8 2104AFE Management Accounting Integrated Variance Analysis 4-Variance Analysis VOH Spending Variance ($4,500 F) VOH Efficiency Variance ($15,000 U) FOH Spending Variance ($9,000 U) Production-Volume Variance ($46,000 U) 11
Dr Allen Huang’s Lecture Notes 2013_Topic 8 2104AFE Management Accounting Spending Variance Efficiency Variance Production-Volume Variance VOH $4,500 F $15,000 U Never a variance FOH $9,000 U Never a variance $46,000 U 3-Variance Analysis OH Spending Variance (VOH + FOH Spending Variances) $4,500U VOH Efficiency Variance ($15,000 U) Production-Volume Variance ($46,000 U) 2-Variance Analysis Flexible-Budget Variance (Spending + Efficiency Variances) $19,500U Production-Volume Variance ($46,000 U) 1-Variance Analysis Total OH Variance ($65,500 U) Journal Entries Variable Overhead Costs and Variances 1. To record actual VOH costs incurred VOH Control 130,500 Accounts Payable and various other accounts 130,500 2. To record VOH costs allocated Work-in-Process Control 120,000 VOH Allocated 120,000 3. To record variances for the accounting period VOH Allocated 120,000 VOH Efficiency Variance 15,000 VOH Control 130,500 VOH Spending Variance 4,500 12
Dr Allen Huang’s Lecture Notes 2013_Topic 8 2104AFE Management Accounting 4. To write off variance accounts to cost of goods sold.
3. To record variances for the accounting period
4. To write off variance accounts to cost of goods sold.
Note : Under-/over-allocated indirect costs (difference between actual indirect costs incurred and indirect costs allocated) discussed in Topic 3 (Chapter 5, Appendix 5-1) are further decomposed into the four types of overhead variances under this topic. Note: Activity-based costing and variance analysis (pp. 536-9) is excluded. 13
Dr Allen Huang’s Lecture Notes 2013_Topic 8 2104AFE Management Accounting

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